Exxon Mobil (XOM) - Get Exxon Mobil Corporation Report said Thursday that it anticipates higher gasoline prices will boost its earnings by $700 million to $1.1 billion in the fourth quarter from the third quarter.
An increase in natural gas liquids prices should tack on another $400 million to $800 million, the energy titan wrote in a filing with the Securities and Exchange Commission.
Changes in chemical margins will subtract $600 million to $800 million from earnings, changes in unsettled derivatives will add $500 million to $1.1 billion, and changes in downstream refining margins will have a neutral to negative $200 million impact, Exxon said.
The stock recently traded at $61.08, up 0.47%.
Morningstar analyst Allen Good puts fair value at $76, assigning the company a narrow moat.
Exxon’s “combination of potential earnings growth and cash return is unrivaled elsewhere in the sector,” he wrote earlier this month. Given that and the company’s discount to his fair value estimate, “we continue to see Exxon as the best option among the integrated oils,” Good said.
“ExxonMobil helped allay fears about capital discipline by extending its prior annual capital spending guidance of $20 billion-$25 billion another two years to 2027.
“The company refrained from giving precise 2022 spending guidance, but it will fall within that range, marking an increase from the anticipated $16 billion in 2021, given an increase in upstream development and resumption of downstream and chemical projects that were put on hold in 2020.
“However, higher 2022 capital spending was largely expected, leaving the extension to 2027 [as] the important takeaway.”